Supporting women will help companies compete in the innovation economy.
We are having real conversations now about getting more women into every level of our organizations and onto boards, and that’s a good thing. But we need to get beyond conversations. We need to get to the point where every CEO believes that if we don’t do this, we will lose relevance and customers, and realize that competitors who are embracing diversity will win.
— Debjani Ghosh, president, Nasscom
In the innovation economy, if you want to discover a way to gain an advantage that’s hiding in plain sight, we have good news and bad news.
The good news is that a growing body of research shows that increasing the number of women leaders can be key to your company’s future success. More good news? There are women either in your company or available to be recruited right now who are ready, willing, and able to take up the challenge of learning to lead in the digital economy.
The bad news is that most companies aren’t doing much of anything that’s substantive or creative to capitalize on this critically important resource. If company leaders were, they wouldn’t be facing the embarrassing gender talent gap that now exists in executive ranks at companies around the world.
Women represent more than 47% of the corporate workforce, but at the C-suite level, that number drops significantly. Ultimately, so many promising young women never reach the most influential corporate roles. Quest, a nonprofit research center in Lexington, Massachusetts, that focuses on early career female talent, conducted research that indicates a breakdown in hiring and developing women for managerial and leadership roles once they cross the early stages of their career. According to Quest’s research, both line-of-business and talent managers make assumptions that limit young women’s career and professional advancement opportunities, such as women may be unwilling to travel or that starting a family will lead them to opt out of challenging roles.
While the corporate world has made progress in advancing women’s careers in leadership positions, there is still a long way to go in achieving true gender equality in the workplace. Shouldn’t every company want to cast as wide a net as possible to attract and develop the best and brightest talent available? In some cultures, this remains a debate. For most companies, though, it is a challenge that leaders can address and solve.
The Gender Equality Opportunity
Let’s ask three simple questions:
- What is the opportunity available to companies operating in the digital economy if they were to hire and develop more women?
- Why are many companies still missing out on the opportunity?
- What can we do right now to take advantage of the opportunity?
What Is the Opportunity?
According to a study by the McKinsey Global Institute, advancing women’s equality and ensuring that they reach their full potential could give a significant boost to the global GDP. As Susan Sobbott, former president of American Express Global Commercial Services, puts it, “In the innovation economy, today’s CEOs, boards, and top leadership teams need to create a clear narrative about embedding inclusiveness as part of their culture and talent pipeline.”
In this changing world, gender parity can become a competitive advantage in helping organizations stay relevant and ahead.
Why Is It Still Largely a Missed Opportunity?
Women are entering the workforce in greater numbers than ever before. But companies aren’t doing enough to support their career development and advancement. Specifically, they aren’t providing educational and mentoring opportunities to help women ultimately progress to senior leadership and C-suite roles.
In many cases, we’ve heard the message that this is not an easy challenge to resolve. In addition to insufficient role models for women who aspire to leadership roles, there is inadequate organizational attention to make this a solvable business problem. While some progress is being made, most companies are failing the gender equity test. And it is not just the women who are losing. Companies are losing their competitiveness. Patty McCord, former chief talent officer at Netflix, points out:
We did all kinds of studies at Netflix on achieving extraordinary performance, and one thing we all learned was that diverse teams perform better and produce better outcomes for customers. Yet now, I speak to leaders from companies around the world and they often tell me that their gender deficit at the leadership level is due to a pipeline problem — that they just can’t find [women leaders]. My response is: Really? Have you actually paid attention to the women working alongside of you and sitting right in front of you?
Women need champions — people who empower them to thrive — to advance their careers. But when 95% of senior leaders are male, do women truly have advocates enabling them to see a viable career path forward?
Creating such crucial support systems through deliberate investments will go a long way. We’ve seen the data. We understand the challenge. It is time to realize we need to get to work.
What Can We Do Right Now?
- Set a clear message and tone from the top that diversity and inclusion is a business imperative, not a corporate social responsibility program.
- Commit to hiring at least at levels that reflect demography — no more feeling great that your company is hiring up to 20% women!
- Pay attention to women’s career advancement needs, and put policies and practices in place to move them along. That includes development initiatives, networks with other aspiring leaders, and coaching and sponsorship — all of which should include male and female champions.
- Use data analytics and insights gleaned to help remove biases in your talent management and development decisions, ensuring hard data is used to support the benefits of gender balance in the workplace. As an example, if you observe a gender skew in the interview conversion percentages for a role, probe further. Review the job description and analyze the composition of your interview panel.
- Measure progress and results. Hold your leaders accountable for hitting their gender equality numbers, just like any other metric you would value in your business decision-making process.
In closing the gender gap, your customers will benefit, your teams will benefit, and your bottom line will benefit — and it’s the right thing to do.
What are you waiting for? Hire and develop more women into managerial and leadership roles and your company will be better prepared to compete in the innovation economy.
About The Authors
Douglas A. Ready is a senior lecturer in organizational effectiveness at the MIT Sloan School of Management, the founder and CEO of the International Consortium for Executive Development Research, and an MIT Sloan Management Review guest editor. Carol Cohen is senior vice president of talent management and development at Cognizant Technology Solutions and a founding board member of the Cognizant U.S. Foundation. She is a frequent guest speaker on a broad range of topics at forums such as MIT, LBS, HR, and business conferences.